Nov. 9 (Bloomberg) -- European soccer champion Chelsea FC
Plc today announced its first profit since Russian billionaire
Roman Abramovich bought the west London club in 2003.

The Blues, who won the European Cup for the first time in
May, made a 1.4 million-pound ($2.2 million) profit on record
sales of 255.7 million pounds for the year ended June 30,
according to a statement on the club’s website. The club last
year lost 67.7 million pounds on revenue of 222.3 million
pounds.

Abramovich has spent more than $1 billion on talent,
setting a platform for the 107-year-old team to win three
Premier League titles, four F.A. Cups and the Champions League
under his leadership.

“Our club philosophy is built on success,” Chief
Executive Officer Ron Gourlay said in a statement. “We had that
success on the field this year, as we were the first London team
to win the UEFA Champions League, and we enjoyed it off the
field as well and this helps us inject financial investment into
the team.”

Chelsea’s financial data couldn’t be independently verified
as it’s yet to be published by Companies House, a U.K.
government register that collates company filings. The team had
made an average loss of 77.6 million pounds during the previous
seven seasons, according to Bloomberg calculations.

F.A. Cup

The club credited last season’s on-field success -- when it
also won the F.A. Cup -- and a 28.8 million-pound profit in the
transfer market for the 15 percent year-on-year increase in its
sales. It said gains were also made in commercial activities
without providing details. Samsung renewed a 15 million-pound
per season agreement as the club’s jersey sponsor in May.

Chelsea’s announced profit in the transfer market comes as
it continued to spend lavishly on buying new players to replace
ageing performers like Nicolas Anelka, Didier Drogba and Alex,
who all moved on.

In the year to June 30, it brought in players including the
quartet of Juan Mata, Eden Hazard, Gary Cahill and Romelu
Lukaku, who cost a combined 80.5 million pounds, according to
the Soccerbase website. The club didn’t break down player-recruitment costs. That outlay can be amortized over the
duration of the contract, meaning the spending is spread across
several years.

Chelsea may have cut its wage bill by exchanging older
players on expensive contracts with younger talent, though
salary data wasn’t in the club’s statement. Club spokesman Steve
Atkins said the accounts will be published by Companies House
later this year.

Villas-Boas Fired

During fiscal 2012, Chelsea fired coach Andre Villas-Boas
just six months after recruiting him from Porto. The team didn’t
reveal how much it paid to cancel his contract or those of his
assistants.

Last year’s accounts showed it cost the team about 30
million pounds to buy Villas-Boas, who now coaches Tottenham,
out of his contract in Portugal and to also pay off his
predecessor Carlo Ancelotti.

“It looks to me like great season on the pitch explains
the revenue rise,” said Andy Green, a London-based analyst.
“The impressive thing is they’ve kept costs under control and
they’ve done that by offloading high-earning players, but
looking to the future they’ve spent a lot on new players who
will have to be paid.”

Chelsea’s financial upturn comes as new rules that penalize
teams for spending beyond their income start to take effect.
UEFA, European soccer’s governing body, is studying annual
results and from 2014 will punish teams that breach its break-even rules, with the ultimate penalty being exclusion from the
Champions League and Europa League competitions.

Fair Play

The so-called financial fair play legislation initially
allows teams to have a maximum loss of 5 million euros or 45
million euros, providing that amount is covered by an equity
infusion by the team’s owner. Abramovich converted a 166.6
million-pound loan into equity to make Chelsea debt free,
according to the club’s statement.

Chelsea is currently second in the Premier League and
remains in contention to qualify for the knockout stages of the
Champions League with two group games following its last-minute
3-2 win over Ukraine’s Shakhter Donetsk on Nov. 6.